Various Examples Discussing Income Tax Audit Applicability

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CA Mayur J Sondagar | Aug 12, 2021 | Views 701413

Various Examples Discussing Income Tax Audit Applicability

Various Examples Discussing Income Tax Audit Applicability

Q Source of Income F.Y.19-20 F.Y.20-21 Reason
Turnover Profit Profit % Section Turnover Profit Profit % Audit ???
1 Business 3 Crore 9 Lakh 3% 44AB 1.5 Crore 4.5 Lakh 3% Yes Note 1
No Note 2
2 Business 1.12 Crore 9 Lakh 8% 44AD 1.5 Crore 6 Lakh 4% Yes Note 1
Yes Note 3
3 Profession 60 Lakh 12 Lakh 20% 44AB 40 Lakh 10 Lakh 25% Yes Note 6
4 Business 3 Crore 9 Lakh 3% 44AB 90 Lakh 3.6 Lakh 4% No Note 1
5 Business 1.12 Crore 9 Lakh 8% 44AD 90 Lakh 3.6 Lakh 4% Yes Note 4
6 Business 1.12 Crore 9 Lakh 8% 44AD 90 Lakh 1.8 Lakh 2% No Note 5

Note 1 As per S. 44AB (a), Audit is required if turnover in business exceeds 1 crore rupees in the previous year so if turnover is up to 1 crore then an audit is not required even though the profit is below 8 % / 6 %
Note 2 Turnover limit as per proviso to S.44AB (a) is 10 crore if Receipts and Payments in cash does not exceed 5 % if these conditions are satisfied then an audit is not required as per S.44AB(a)
Note 3 Even though Receipts and Payments in cash does not exceed 5 % then also audit is applicable as per S.44AB (e), because proviso to S.44AB (a) nowhere specifies exemption from S.44AB (e).
Note 4 As per S.44AB (e) Audit is applicable as S.44AD (4) Applicable and Total Income above the basic exemption limit
Note 5 Audit is not required as S.44AD (4) Applicable but Total Income is below the basic exemption limit
Note 6 As per S.44ADA (4), Audit is required as Profit is lower than S.44ADA (1) and Total Income above the basic exemption limit

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